The Augmented Reality Retail Hype Cycle 2012

This is a presentation I gave at the 2012 Augmented Reality Event on the AR Retail Hype Cycle. This covers different areas of AR commerce and retail such as digital living room, tablets, smartphones, web and in-store kiosks. Each different segment is plotted against the "AR Retail" Hype Cycle with supporting info.

we’ve been developing our product since 2009. Multiple patents pending in the space. Why the focus on apparel? Because we can solve a problem for shoppers &amp; retailers today, and it’s a category with impressive revenues and growth projections. Focus of the Retail Hype Cycle today will be on the apparel and accessories categories given they are largest. - eMarketer - The apparel and accessories category will lead ecommerce sales growth in the US through 2016, with sales gains of 20% predicted for this year. By 2016 the category will tally $73 billion worth of online purchases, accounting for just over 1/5th of all US online retail ecommerce sales. http://www.emarketer.com/Article.aspx?id=1008919&amp;R=1008919

What is the Hype Cycle? It tracks new technologies to see how long it takes for mainstream adoption. Note that it has AR on the downward side of the peak of inflated expectations and is 5 – 10 years until mainstream adoption Technology Trigger – As the technology comes out, the hype begins Peak of Inflated Expectations – Hype overtakes reality of the technology Trough of Disillusionment – Hype recedes, technology struggles to gain traction Slope of Enlightenment – Technology use cases are implemented; traction begins Plateau of Productivity – Mainstream consumer adoption Agree – AR is hyped Disagree – That AR will take 5-10 years for mainstream adoption as a whole

Other areas specific to AR, like gaming, are much further along on the AR Hype Cycle…

Shipped Not Sold… Promise in this area with Samsung / LG launched webcams integrated into sets. Will be awhile until mainstream retail adoption.

Just started to see some retail applications crop up in the last year. TI’s TryLive is one example Even with growing hardware numbers, still represents only 11% of US consumers. Like Smartphones – focus has been on apps to date (more on that later) Usability – only supports 1-3 foot experience through front facing cam Consumer Usage Habits – that takes us to next slide

From Google report. Email / Games / Social Networking still dominate usage. However, there is commerce related activity. From same report, more people use tablets at home than while mobile and out of the house. Finally, also from same report, people prefer the desktop version of sites to apps.

US leads with adoption of tablets at 11% of all consumers Though tablet usage is trending upwards, it is still dwarfed by PC usage Final stat shows that consumers are not ditching PC’s in favor of tablets. Rather it’s becoming a 3 rd and 4 th screen.

Was just implemented in their flagship store in Manhattan. Despite all the recent hype around Kinect enabled in-store displays, experimentation has been around for awhile.

Kinect prototypes have been in the market for a year or two – trending upwards quickly. Issues with 3D Assets Costs / 3D Camera Realities – Will address in more detail later. Issue with strategy behind these in-store implementations – what is the strategy if clothing is right there next to display unit? Some new display techs are promising fit, but more on that later…

Nobody is in doubt that mobile is huge….but what about for AR retail and commerce?

Lost of apps. Lots of press. Where are the users? Beginning to see the “backlash” in the tech blogs… Mobile AR no longer the media darling Note: This is plotted right about where Gartner has all of AR. Market Fragmentation – iOS, Android, Blackberry, Windows Usability – How does AR Retail really work on a Smartphone? That’s the question still to be answered…as we’ll see on the next slide

Relevant for tablets and mobile Shopping/Retail doesn’t even get it’s own piece of the pie. Almost 3 out of 4 mobile sessions for gaming/social networking After 12 months, only 4% of users are still using that app. Rate of abandonment is alarmingly high. And if we dig down a bit deeper into M-commerce… http://reyt.net/76-of-people-stop-using-mobile-apps-in-the-first-3-months-after-download/8750

We see that even with the hype around m-commerce, it is still miniscule compared to overall e-commerce. For Forrester, m-commerce only includes smartphones – not tablets 2016 will still be dominated by PC and tablet related commerce

Last but not least…we have the PC. The forgotten platform… Despite all the hype around smartphones, tablets, etc. there are 1.5 billion PC’s in use worldwide.

Low expectations but it’s the most market ready &amp; scalable of all solutions. 1.5 billion PCs. E-commerce married to 2D / Flash. HTML5 not viable tech yet (more on that later). Browser plug-in’s don’t work. But 2D still effective and 3D is more a hype issue for brands/industry, not consumer issue. LazyLazy 2x-3x &amp; Barbie (6 photos per) Consumer Hardware specs – not everybody has a quad processor at home…need to make the experience accessible to majority of consumers. Perception is really driven by our industry and brands. 3D doesn’t matter to shoppers. It’s about the best experience for the consumer, not the best technology . Betamax example. Beta was superior video quality and technology, but VHS was lower quality and focused on a key consumer problems. It could record longer and was cheaper. People could now record a ballgame… We all know how that turned out.

By not focusing on the PC market, you’re basically not fishing where the fish are right now and the foreseeable future…we can all try to move upstream, but the migration isn’t happening as quickly as the hype might suggest.

One consistent issue across all platforms has been 3D asset creation. Though CAD files often exist for electronics, autos and other consumer products, apparel and some accessories are sketched. 3D apparel needs to be modeled on sketches. Then textured against fabric. Then you need physics engine built to apply realistic animations. Then the retailer thinks you’ve lost your mind when they see the price tag. This is currently not a scalable solution for retailers. Even with 3D, models are exposed when body turns and there’s a delay with camera tracking and model animating. Often looks worse than high resolution photo.

We often hear that HTML5 will be the future. The one ring to rule them all. Not any time soon. Especially for AR. No official webcam support No official DRM support No protection of IP Standards still being developed. Not ready for prime time.

As an industry, it’s imperative to focus on today. What If’s won’t drive adoption. Reality will. How can we get AR retail to mainstream adoption faster? Here are 5 things we can start doing…

We often use a saying - Jack of all trades, master of none… We’re focused on e-commerce and won’t stop until our product is synonymous with the Zoom feature on shopping sites. We’re fine with being a one-trick pony. We refer any mobile related work to Aurasma all the time. Clients get an expert that’s focused on their specific problem Aurasma gets a lead We aren’t taken off our ecommerce focus. And the industry gets a good reputation Everybody wins

The industry is in it’s infancy. We need to protect it’s image and manage expectations appropriately to drive investment. Depth Sensing Cameras are not accurate up to 3cm (or about an inch). 2D cameras are even more inaccurate. Physic engines also add to the inaccuracy. Do we wish we could solve the problem of fit? Yes. But a size 12, is not going to fit two women who wear that size very differently. Where does it bulge? Hang? Etc. We can’t call things a Fitting Room if we’re not actually solving the fit issue…

Data will validate the industry, we all need to work together here. Like the MMA (not the octagon, but the Mobile Marketing Association), we need to aggregate data, share best practices, white papers, etc. Right now there’s too many conflicting viewpoints because of different companies agendas. We need to have an organization and site that promotes the industry as a whole.

Shoppers It’s not about a cool technology. it’s about the experiences you can create with that technology. People want intuitive, seamless experiences without barriers. Retailers Solutions need to be accessible to businesses of all sizes, and they need to be fast/easy to integrate. 4 months production and a 40k entry point is not helping most retailers.

Now we have the big one. This is where I think the AR hype was just ridiculous. Google video is cool but is misleading consumers. Small disclaimer notes that the video shows what could be potentially possible in the future. But we already know what’s potentially possible from movies like Iron Man 2 and Minority Report. The difference? Those are Sci-Fi films and this is a product that’s was scheduled for an end of year release. The more we hype the future of AR technology that’s not grounded in current reality, the more disillusioned consumers will become. A lot of amazing things can already be done with current AR tech. Listen to what the market’s asking for now and stop the hype. It’s imperative that we start selling today’s benefits, and not tomorrow’s dreams.

6.
Something To Keep In MindWe’ll be discussing the market viability and scalabilityof AR technology triggers FOR RETAIL within today’s marketplace, not 2 years from now, or 5. AR TRIGGERS 2.Digital Living Room 3.Out Of Home – In Store Kiosks 4.Smartphones 5.Tablet 6.Web

7.
The Digital Living Room For AR Retail Kinect has shipped over 18 million units worldwide. Thats shipped, not sold. (January 2012)

12.
Tablets Still Suffer From “BSOS” • The US has the highest rate of tablet usage in the world at just 11% of all consumers. • Tablet usage is dwarfed by PC usage. • In the US, 73% of smartphone- toting consumers also use a laptop or other portable computer, and 57% use a desktop PC. Only 17% of this audience uses a tablet. Google – “Mobile Internet Smartphone Adoption Insights Report”

17.
A Bit More On The App Ecosystem Over 1 million Apps Between Apple & Android 600k+ Apple / 450k+ Android People Use Apps For …And They Don’t Use Gaming & Socializing… Them For Long

18.
A Bit More On M-Commerce Forrester predicts mobile commerce will account for only 7 percent of all ecommerce sales by 2016 and 1 percent of overall sales. Forrester Research Report, "Mobile Commerce Forecast: 2011 to 2016"

19.
Web For AR Retail“Today the industry sells more than 1 million PCs each day and there are 1.5 billion PCs in use worldwide” - Intel

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1) Sell Today’s Benefits, Not Tomorrow’s “Dreams”“You could not do AR with a display like this… In one simple fake video,Google has created a level of over-hype and over-expectation that their hardware cannot possibly live up to… It’s going to generate ideas in people and expectations that just might not match.” - Blair MacIntyre, Director of the Augmented Environments Lab at Georgia Tech